SEC v. Ryan C. Squillante, No. 3:25-cv-01457, District of Connecticut (Sept. 5, 2025) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

SECURITIES AND EXCHANGE
COMMISSION,
   Plaintiff,
 v.

RYAN C. SQUILLANTE,

   Defendant.

      Civil Action No. 25-CV-

COMPLAINT
 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
following against defendant Ryan C. Squillante (“Squillante” or “Defendant”):
SUMMARY
1. This is an insider trading action.  Between August 2022 and June 2023, Squillante
used confidential information that he obtained in the course of his employment as a trader at an
investment firm to trade in the securities of at least ten different publicly-traded companies.
2. Squillante’s employer was consulted as a potential investor in numerous public
offerings of securities.  At the point of those consultations, the information that Squillante and
his employer received was nonpublic and confidential and was provided so that his employer
could determine whether it wished to participate in the public offerings.  Squillante was
obligated to protect the confidentiality of that information.
3. Instead, Squillante used the confidential nonpublic information that he received as
part of his employment to place trades in his personal brokerage accounts.  As a result of his
conduct, Squillante reaped an unfair advantage over other investors in the public markets and
earned approximately $216,965 in illegal trading profits.

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4. As a result of the conduct alleged herein, Squillante violated, and unless
restrained and enjoined will continue to violate, Section 10(b) of the Securities Exchange Act of
1934 (“Exchange Act”) and Rule 10b-5 thereunder [15 U.S.C. §78j(b); 17 C.F.R. §240.10b-5].
5. The Commission seeks a permanent injunction against Squillante, enjoining him
from engaging in the transactions, acts, practices, and courses of business of the type alleged in
this Complaint, disgorgement of ill-gotten gains he received from the unlawful conduct set forth
in this Complaint pursuant to Section 21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)],
together with prejudgment interest, civil penalties pursuant to Section 21A of the Exchange Act
[15 U.S.C. §78u-1], and such other relief as the Court may deem appropriate.
JURISDICTION AND VENUE
6. This Court has jurisdiction over this action pursuant to Sections 21(d)(1), 21(e),
and 27 of the Exchange Act [15 U.S.C §§78u(d)(1), 78u(e) and 78aa].
7. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15
U.S.C §78aa].  Defendant resides in the District of Connecticut.  Also, certain of the acts,
practices, transactions and courses of business constituting the violations alleged in this
Complaint occurred within the District of Connecticut, and were effected, directly, or indirectly,
by making use of the means or instrumentalities of transportation or communication in interstate
commerce, or the mails, including the internet and the telephone.
DEFENDANT
8. Squillante, age 40, resides in Westport, Connecticut.  From May 2021 to mid-
December 2023, Squillante was employed as the Head of Equity Trading at an investment firm
(the “Investment Firm”).   For several months during 2024, Squillante consulted as an equity
trader to an asset management firm.  Previously, Squillante was a registered representative of a

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broker-dealer firm from 2007 to 2009.
FACTUAL ALLEGATIONS
9. As part of Squillante’s job, he evaluated potential investments in equity securities
for the Investment Firm.  Those investment opportunities included secondary offerings of
securities by publicly-traded companies.  Those secondary offerings were managed by
underwriters, which are investment banks that agree to buy the securities from the companies
issuing them and then to sell those shares to investors.
10. In multiple instances, Squillante received material nonpublic information about
upcoming offerings because the underwriter engaged in a process known as “wall crossing” to
determine whether Squillante’s employer would be interested in purchasing the securities that the
underwriter was selling.  “Wall crossing” typically refers to the process by which an investment
bank provides nonpublic and confidential information about an upcoming offering to a
prospective investor after obtaining that prospective investor’s agreement to keep the disclosed
information confidential and to use it only to decide whether the prospective investor wishes to
invest in the planned offering.
11. In the instances in which Squillante received material nonpublic information
about a company’s upcoming offering, or other material nonpublic information about a company,
through the wall crossing process, he knew and understood that he was receiving material
nonpublic information and was not permitted to trade in that company’s stock until either the
material nonpublic information was disclosed to the public or the information otherwise became
stale, such as by the proposed offering being withdrawn by the company.
12. Squillante had a duty to keep the material nonpublic information that he learned
as part of his employment confidential.  Squillante had a relationship of trust and confidence

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with the Investment Firm under which he often obtained confidential information in the course of
his work and he expressed his understanding that the information was to be kept confidential and
not used for his personal gain.
13. Despite Squillante’s understanding that he was not permitted to trade based on the
material nonpublic information he received in the course of his employment, and unbeknownst to
his employer, Squillante nonetheless traded on that information in his personal brokerage
accounts on at least twelve occasions.
14. Squillante knew or was reckless in not knowing that public announcements of
secondary offerings of stock by public companies often cause a company’s stock price to
decrease.  In addition, he sometimes learned other negative information about these companies
during the wall crossing process that he knew, or was reckless in not knowing, was likely to
cause the company’s stock price to decrease once the information was publicly announced.
Squillante’s personal trading on the basis of material nonpublic information that he learned
through his employment typically took the form of Squillante selling short the stock of the
companies about which he had obtained material nonpublic information.  Squillante was, in
essence, predicting that each company’s stock would decrease in value because he had material
nonpublic information that would negatively impact the stock price.
15. As an employee of the Investment Firm, Squillante owed both the Investment
Firm and the underwriters with whom he engaged in business dealings on behalf of the
Investment Firm a duty to protect the confidentiality of the highly sensitive and nonpublic
information he was given in order to evaluate whether the Investment Firm wished to participate
in proposed securities offerings.  Squillante breached that duty by trading on that information in
his own accounts.

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16. In at least six instances, Squillante’s personal trading began within about 3 hours
of the time when he obtained the negative material nonpublic information about the company
whose stock he traded.
17. Examples of two instances in which Squillante traded on material nonpublic
information that he obtained through the course of his employment are described below.
Squillante’s Trading in the Stock of Praxis Precision Medicines, Inc.
18. In February 2023, Praxis Precision Medicines, Inc. (“Praxis”) was a publicly-
traded neuroscience company that was conducting clinical trials to support seeking approval to
market certain drugs.  On February 27, 2023, the underwriter for a potential secondary offering
of Praxis stock emailed an employee of the Investment Firm to discuss a new potential offering.
That employee responded by email at about 3:11 pm, saying that he was too busy to talk but that
he would have Squillante “reach out right now. . .”
19. Approximately 11 minutes later, at 3:22 pm, Squillante emailed the underwriter,
saying it was “good to speak quickly” and that he realized the underwriter did not have his email
address so he was giving it to him in that email message.
20. Two minutes after emailing the underwriter, at about 3:24 pm, Squillante sold
short 2,500 shares of Praxis stock in one of his personal brokerage accounts.
21. The same day, at about 3:38 pm, Squillante received an official “wall crossing”
email message from the underwriter stating:
This e-mail will confirm that you have agreed to receive confidential
information about Praxis Precision Medicines, Inc. (NASDAQ: PRAX)
(the “Company”), including the fact that the Company is contemplating a
securities offering (the “Offering”); the terms, conditions and status of
such Offering (including any information provided by [the underwriter]
and any “cleansing” or similar email); and certain non-public clinical data,
and you have further agreed to hold such information in confidence and
not communicate this information to anyone outside of your firm (other

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than in response to a request by any regulatory authority, court or tribunal,
or as required under any law or regulation).  In addition, the receipt of this
information may affect your firm’s ability to conduct certain research,
sales and trading activities.  . . . . As such, you acknowledge your
obligation to use the information that we provide to you only for the
purpose of evaluating the Offering.  You should consult your
organization’s own internal rules and policies regarding such matters.
You and others in your organization who receive this information will be
insiders and thus subject to these restrictions until such time as the
information is publicly announced (which will include the announcement
of the non-public clinical data and may include announcement of the
Offering) or you are cleansed by us or the Company.

22. Two minutes after receiving that wall crossing email, Squillante responded by
email to the underwriter, stating “Thank you – we agree.”  Squillante, his colleagues at the
Investment Firm, and the staff of the underwriter then exchanged additional emails to schedule a
teleconference to discuss the potential offering in more detail.  A meeting invitation, which
included Squillante and his colleagues at the Investment Firm, was sent and scheduled for the
following morning.
23. During that morning meeting on February 28, 2023 between the underwriter and
Squillante’s colleagues at the Investment Firm, the underwriter discussed both the contemplated
securities offering and recent negative clinical drug trial results and the timing of a press release
concerning those results.
24. Following that meeting on February 28, 2023, Squillante sold short an additional
12,094 shares of Praxis stock in one of his personal brokerage accounts.  Over the next two days,
March 1 and March 2, Squillante sold short an additional 23,492 shares of Praxis stock in
another of his personal brokerage accounts.  By the end of the trading day on March 2, 2023,
Squillante’s personal brokerage accounts w ere short a total of 38,086 Praxis shares.
25. On March 3, 2023, at 7:30 am, Praxis publicly disclosed its negative clinical trial
results.  These results had previously been shared with Squillante’s colleagues at the Investment

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Firm via the wall crossing protocol.  Specifically, Praxis announced that the trial for its most
advanced drug candidate to treat nervous system tremors did not establish the primary efficacy
endpoint by a statistically significant amount compared to the placebo.
26. Only minutes later, between 7:41 am and 7:49 am, Squillante purchased a total of
38,086 shares of Praxis stock to cover his short position in his two personal brokerage accounts.
The market price of Praxis’s stock began to drop between the public announcement of its clinical
trial data and Squillante’s covering purchases.  Overall, in the first trading day after Praxis’
public announcement, the market price of Praxis stock dropped by almost 66%, from a closing
price of $2.92 per share on March 2, 2023 to a closing price of $0.9965 per share on March 3,
2023.
27. As a result of Squillante’s illegal use of material nonpublic information about
Praxis, he realized $46,421 in proceeds from his trading in Praxis stock between February 27 and
March 3, 2023.
Squillante’s Trading in Zynex, Inc.
28. In May 2023, Zynex, Inc. (“Zynex”) was a publicly-traded company that
designed, manufactured and marketed medical devices.  On the morning of May 2, 2023, the
underwriter for a potential transaction relating to Zynex had a conversation with Squillante to
discuss that potential transaction.  The potential transaction had two parts: (1) the company was
considering a convertible debt securities offering, and (2) a major company shareholder was
considering a secondary offering of the company’s common stock owned by that shareholder.
29. The underwriter sent a follow-up email to Squillante at 12:05 pm that day,
confirming their conversation and further confirming that, “in the course of such conversation
you [Squillante] have received non-public and potentially material information within the

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meaning of the U.S. federal securities laws” about the proposed transaction, its “timing,
structure, terms and proposed use of proceeds of the proposed convertible debt offering” and that
Squillante may get additional information about the transaction in the future.
30. The underwriter’s email further stated:
You acknowledge that the U.S. federal securities laws and other laws
prohibit any person who has material non-public information about a
company from purchasing or selling securities of that company or from
communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person is likely to purchase
or sell such securities.  You have agreed that, for so long as the
confidentiality obligation remains in effect, you will not directly or
indirectly engage in market transactions relating to the Company’s
securities and related instruments, . . . .  You have further agreed that, for
so long as the confidentiality obligations remain in effect, you will treat
and keep all non-public information that you receive as confidential, you
will not disclose any of the non-public information that you receive to any
other person in your firm without the same restrictions regarding the use
of the non-public information being imposed on such persons and you will
use the non-public information only in connection with evaluating,
analyzing and negotiating a potential investment in the Company and not
for any other purpose.

31. Squillante responded to the underwriter’s email 10 minutes later, at 12:15 pm, and
selected a time from among those that had been proposed for a follow-up meeting with the
underwriter.
32. Approximately 15 minutes later, an employee of the underwriter sent a calendar
invitation to Squillante and several of his colleagues at the Investment Firm to set a meeting for 9
am the following morning, May 3, 2023.  The calendar invitation also provided a link to
documents that would be discussed in detail at the meeting.  Squillante knew, or was reckless in
not knowing, that the eventual public announcement of the transaction being discussed would
likely drive Zynex’s stock price down significantly.
33. At 12:05 pm on May 2, 2023, the same time that he received the underwriter’s

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email confirming their conversation about Zynex, Squillante began selling short shares of Zynex
stock in one of his personal brokerage accounts.  That afternoon, between 12:05 pm and 3:58
pm, Squillante sold short a total of 2,900 shares of Zynex.
34. On the following day, May 3, 2023, Squillante sold short an additional 10,100
shares of Zynex stock in two of his personal brokerage accounts.  By 3:44 pm on May 3, 2023,
Squillante’s personal brokerage accounts had sold short a total of 13,000 Zynex shares.
35. On May 3, 2023, at 4:01 pm, Zynex announced that it would be making an
offering of $50 million of its senior convertible notes and it also announced that its CEO was
beginning an underwritten public offering of 2,000,000 shares of his Zynex stock.
36. Only minutes later, beginning at about 4:14 pm and continuing until 4:20 pm,
Squillante purchased 6,500 shares of Zynex stock to cover fully his short position in one of his
personal brokerage accounts.  Squillante fully covered the short position in his other personal
brokerage account by buying shares beginning at 4:36 pm on May 3 and continuing the next day.
The market price of Zynex’s stock dropped between the public announcement of securities
offerings and Squillante’s covering purchases.  Overall, in the first trading day after Zynex’s
public announcement, the market price of Zynex stock dropped by about 35%, from a closing
price of $14.56 per share on May 3, 2023 to a closing price of $9.37 per share on May 4, 2023.
37. As a result of Squillante’s illegal use of material nonpublic information about
Zynex, he realized $37,528 in proceeds from his trading in Zynex stock between May 2 and May
4, 2023.
The Scope of Squillante’s Misconduct
38. Squillante engaged in misconduct similar to that detailed above relating to Praxis
and Zynex shares with a total of at least ten different securities.  The chart below lists the dates

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on which Squillante engaged in illegal trading on the basis of material nonpublic information
(“MNPI”) that he learned, and had a duty to keep confidential as part of his employment by the
Investment Firm.  The chart below also lists the profits that Squillante earned from his trading in
each of the ten securities.
Offering
Company
Date/Time
of Wall
Crossing
or MNPI
Awareness
Date/Time
Squillante
Began to
Trade
Date/Time of
Public
Announcement of
MNPI
Price Decrease
of Offering
Company’s
Stock Within
One Day of
Public
Announcement
Squillante’s
Profits from
Trading
Accelerate
Diagnostics, Inc.
8/15/2022 8/16/2022
9:35 AM
8/17/2022
6:00 PM
Secondary Offering
27.19% $10,575
Accelerate
Diagnostics, Inc.
8/15/2022 8/18/2022
3:00 PM
8/18/2022
9:30 PM
Pricing of
Secondary Offering
49.40% $1,098
Mind Medicine,
Inc.
9/20/2022
8:11 AM
9/20/2022
10:39 AM
9/27/2022
4:17 PM
Secondary Offering
47.06% $53,548
AerSale Corp. 11/14/2022
10:47 AM
11/14/2022
12:58 PM
11/15/2022
5:22 PM
Secondary Offering
and Share
Repurchase
12.73% $2,748
DZS, Inc. 11/14/2022
10:47 AM
11/14/2022
1:05 PM
11/16/2022
4:01 PM
Secondary Offering
15.91% $7,110
Clearfield, Inc. 12/1/2022
7:40 PM
12/2/2022
10:55 AM
12/6/2022
4:12 PM
Secondary Offering
6.22% $9,445
Napco Security
Technologies,
Inc.
2/7/2023 2/8/2023
9:44 AM
2/8/2023
4:05 PM
Secondary Offering
7.68% $8,990
Altisource
Portfolio
Solutions SA
2/8/2023
10:54 PM
2/9/2023
11:15 AM
2/9/2023
4:28 PM
Secondary Offering
12.78% $20,627
Praxis Precision
Medicines, Inc.
2/27/2023
3:22 PM
2/27/2023
3:24 PM
3/3/2023
7:30 AM
Negative Clinical
Results provided in
context of proposed
Secondary Offering
65.87% $46,421
Zynex, Inc. 5/2/2023
12:05 PM
5/2/2023
12:05 PM
5/3/2023
4:01 PM
35.65% $37,528

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Secondary Offering
of Equity and
Offering of
Convertible Notes
ANI
Pharmaceuticals,
Inc.
5/8/2023 5/11/2023
10:48 AM

5/11/2023
4:01 PM
Secondary Offering
5.19% $6,973
DZS, Inc. 5/30/2023
9:15 AM
5/30/2023
11:12 AM
6/1/2023
8:00 AM
Announcement of
Financial
Restatement
36.23% $11,902
    Total $216,965

CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
(Defendant’s Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)

39. Paragraphs 1 through 38 above are re-alleged and incorporated by reference as if
fully set forth herein.
40. By reason of the conduct described above, Defendant, directly or indirectly, in
connection with the purchase or sale of securities, by the use of the means or instrumentalities of
interstate commerce or of the mails, or of any facility of any national securities exchange,
intentionally, knowingly, or recklessly, (i) employed devices, schemes, or artifices to defraud;
(ii) made untrue statements of material facts or omitted to state material facts necessary to make
the statements made, in the light of the circumstances under which they were made, not
misleading; and/or (iii) engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon any persons, including purchasers or sellers of the
securities.
41. By reason of the conduct described above, Defendant violated Exchange Act
Section 10(b) [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R §240.10b-5] thereunder.

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PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that this Court:
A. Permanently restrain Defendant, his agents, servants, employees and attorneys,
and those persons in active concert or participation with him who receive actual notice of the
injunction by personal service or otherwise, and each of them, from violating Section 10(b) of
the Exchange Act [15 U.S.C. §78j(b)], and Rule 10b-5 thereunder [17 C.F.R §240.10b-5] by (i)
buying or selling a security of any issuer, on the basis of material nonpublic information, in
breach of a fiduciary duty or other duty of trust or confidence that is owed directly, indirectly, or
derivatively, to the issuer of that security or the shareholders of that issuer, or to any other person
who is the source of the information; or (ii) by communicating material nonpublic information
about a security or issuer, in breach of a fiduciary duty or other duty of trust or confidence, to
another person or persons for purposes of buying or selling any security;
B. Order Defendant to disgorge, with prejudgment interest, all ill-gotten gains that
were obtained by reason of the unlawful conduct alleged in this Complaint, pursuant to Section
21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)];
C. Order Defendant to pay an appropriate civil monetary penalty pursuant to Section
21A of the Exchange Act [15 U.S.C. §78u-1];
D. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
E. Grant such other further relief as the Court may deem just and proper.

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JURY DEMAND
 The Commission demands a jury in this matter for all claims so triable.
DATED: September 5, 2025
      Respectfully submitted,
      /s/ Kathleen Burdette Shields
      Kathleen Burdette Shields (Mass Bar No. 637438)
      Sarah McAteer (Mass Bar No. 706403)
      SECURITIES AND EXCHANGE COMMISSION
      Boston Regional Office
      33 Arch Street, 24
th
 Floor
      Boston, MA 02110
      Phone: (617) 573-8904 (Shields direct)
      (617) 573-8906 (McAteer direct)
(617) 573-4590 (fax)
      [email protected]
 (Shields email)
      [email protected] ( McAteer email)

Local Counsel:

Michelle L. McConaghy (ct 27157)
Assistant United States Attorney
United States Attorney’s Office
Connecticut Financial Center
157 Church St., 23
rd
 Floor
New Haven, CT  06510
Phone: (203) 821-3700
Fax: (203) 773-5373
[email protected]

UNITED STATES DISTRICT COURT 
DISTRICT OF CONNECTICUT 

 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
   Plaintiff, 
 v. 
 
RYAN C. SQUILLANTE, 
 
   Defendant. 
 

 
 
      Civil Action No. 25-CV- 
 
 
 

 
COMPLAINT 

 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the 

following against defendant Ryan C. Squillante (“Squillante” or “Defendant”): 

SUMMARY 

1. This is an insider trading action.  Between August 2022 and June 2023, Squillante 

used confidential information that he obtained in the course of his employment as a trader at an 

investment firm to trade in the securities of at least ten different publicly-traded companies.  

2. Squillante’s employer was consulted as a potential investor in numerous public 

offerings of securities.  At the point of those consultations, the information that Squillante and 

his employer received was nonpublic and confidential and was provided so that his employer 

could determine whether it wished to participate in the public offerings.  Squillante was 

obligated to protect the confidentiality of that information.   

3. Instead, Squillante used the confidential nonpublic information that he received as 

part of his employment to place trades in his personal brokerage accounts.  As a result of his 

conduct, Squillante reaped an unfair advantage over other investors in the public markets and 

earned approximately $216,965 in illegal trading profits. 

Case 3:25-cv-01457     Document 1     Filed 09/05/25     Page 1 of 13



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4. As a result of the conduct alleged herein, Squillante violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Securities Exchange Act of 

1934 (“Exchange Act”) and Rule 10b-5 thereunder [15 U.S.C. §78j(b); 17 C.F.R. §240.10b-5]. 

5. The Commission seeks a permanent injunction against Squillante, enjoining him 

from engaging in the transactions, acts, practices, and courses of business of the type alleged in 

this Complaint, disgorgement of ill-gotten gains he received from the unlawful conduct set forth 

in this Complaint pursuant to Section 21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)], 

together with prejudgment interest, civil penalties pursuant to Section 21A of the Exchange Act 

[15 U.S.C. §78u-1], and such other relief as the Court may deem appropriate. 

JURISDICTION AND VENUE 

6. This Court has jurisdiction over this action pursuant to Sections 21(d)(1), 21(e), 

and 27 of the Exchange Act [15 U.S.C §§78u(d)(1), 78u(e) and 78aa].   

7. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15 

U.S.C §78aa].  Defendant resides in the District of Connecticut.  Also, certain of the acts, 

practices, transactions and courses of business constituting the violations alleged in this 

Complaint occurred within the District of Connecticut, and were effected, directly, or indirectly, 

by making use of the means or instrumentalities of transportation or communication in interstate 

commerce, or the mails, including the internet and the telephone. 

DEFENDANT 

8. Squillante, age 40, resides in Westport, Connecticut.  From May 2021 to mid-

December 2023, Squillante was employed as the Head of Equity Trading at an investment firm 

(the “Investment Firm”).  For several months during 2024, Squillante consulted as an equity 

trader to an asset management firm.  Previously, Squillante was a registered representative of a 

Case 3:25-cv-01457     Document 1     Filed 09/05/25     Page 2 of 13



3 
 

broker-dealer firm from 2007 to 2009.   

FACTUAL ALLEGATIONS 

9. As part of Squillante’s job, he evaluated potential investments in equity securities 

for the Investment Firm.  Those investment opportunities included secondary offerings of 

securities by publicly-traded companies.  Those secondary offerings were managed by 

underwriters, which are investment banks that agree to buy the securities from the companies 

issuing them and then to sell those shares to investors. 

10. In multiple instances, Squillante received material nonpublic information about 

upcoming offerings because the underwriter engaged in a process known as “wall crossing” to 

determine whether Squillante’s employer would be interested in purchasing the securities that the 

underwriter was selling.  “Wall crossing” typically refers to the process by which an investment 

bank provides nonpublic and confidential information about an upcoming offering to a 

prospective investor after obtaining that prospective investor’s agreement to keep the disclosed 

information confidential and to use it only to decide whether the prospective investor wishes to 

invest in the planned offering. 

11. In the instances in which Squillante received material nonpublic information 

about a company’s upcoming offering, or other material nonpublic information about a company, 

through the wall crossing process, he knew and understood that he was receiving material 

nonpublic information and was not permitted to trade in that company’s stock until either the 

material nonpublic information was disclosed to the public or the information otherwise became 

stale, such as by the proposed offering being withdrawn by the company.   

12. Squillante had a duty to keep the material nonpublic information that he learned 

as part of his employment confidential.  Squillante had a relationship of trust and confidence 

Case 3:25-cv-01457     Document 1     Filed 09/05/25     Page 3 of 13



4 
 

with the Investment Firm under which he often obtained confidential information in the course of 

his work and he expressed his understanding that the information was to be kept confidential and 

not used for his personal gain. 

13. Despite Squillante’s understanding that he was not permitted to trade based on the 

material nonpublic information he received in the course of his employment, and unbeknownst to 

his employer, Squillante nonetheless traded on that information in his personal brokerage 

accounts on at least twelve occasions. 

14. Squillante knew or was reckless in not knowing that public announcements of 

secondary offerings of stock by public companies often cause a company’s stock price to 

decrease.  In addition, he sometimes learned other negative information about these companies 

during the wall crossing process that he knew, or was reckless in not knowing, was likely to 

cause the company’s stock price to decrease once the information was publicly announced.  

Squillante’s personal trading on the basis of material nonpublic information that he learned 

through his employment typically took the form of Squillante selling short the stock of the 

companies about which he had obtained material nonpublic information.  Squillante was, in 

essence, predicting that each company’s stock would decrease in value because he had material 

nonpublic information that would negatively impact the stock price. 

15. As an employee of the Investment Firm, Squillante owed both the Investment 

Firm and the underwriters with whom he engaged in business dealings on behalf of the 

Investment Firm a duty to protect the confidentiality of the highly sensitive and nonpublic 

information he was given in order to evaluate whether the Investment Firm wished to participate 

in proposed securities offerings.  Squillante breached that duty by trading on that information in 

his own accounts. 

Case 3:25-cv-01457     Document 1     Filed 09/05/25     Page 4 of 13



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16. In at least six instances, Squillante’s personal trading began within about 3 hours 

of the time when he obtained the negative material nonpublic information about the company 

whose stock he traded. 

17. Examples of two instances in which Squillante traded on material nonpublic 

information that he obtained through the course of his employment are described below. 

Squillante’s Trading in the Stock of Praxis Precision Medicines, Inc. 

18. In February 2023, Praxis Precision Medicines, Inc. (“Praxis”) was a publicly-

traded neuroscience company that was conducting clinical trials to support seeking approval to 

market certain drugs.  On February 27, 2023, the underwriter for a potential secondary offering 

of Praxis stock emailed an employee of the Investment Firm to discuss a new potential offering.  

That employee responded by email at about 3:11 pm, saying that he was too busy to talk but that 

he would have Squillante “reach out right now. . .” 

19. Approximately 11 minutes later, at 3:22 pm, Squillante emailed the underwriter, 

saying it was “good to speak quickly” and that he realized the underwriter did not have his email 

address so he was giving it to him in that email message. 

20. Two minutes after emailing the underwriter, at about 3:24 pm, Squillante sold 

short 2,500 shares of Praxis stock in one of his personal brokerage accounts. 

21. The same day, at about 3:38 pm, Squillante received an official “wall crossing” 

email message from the underwriter stating: 

This e-mail will confirm that you have agreed to receive confidential 
information about Praxis Precision Medicines, Inc. (NASDAQ: PRAX) 
(the “Company”), including the fact that the Company is contemplating a 
securities offering (the “Offering”); the terms, conditions and status of 
such Offering (including any information provided by [the underwriter] 
and any “cleansing” or similar email); and certain non-public clinical data, 
and you have further agreed to hold such information in confidence and 
not communicate this information to anyone outside of your firm (other 

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6 
 

than in response to a request by any regulatory authority, court or tribunal, 
or as required under any law or regulation).  In addition, the receipt of this 
information may affect your firm’s ability to conduct certain research, 
sales and trading activities.  . . . . As such, you acknowledge your 
obligation to use the information that we provide to you only for the 
purpose of evaluating the Offering.  You should consult your 
organization’s own internal rules and policies regarding such matters.  
You and others in your organization who receive this information will be 
insiders and thus subject to these restrictions until such time as the 
information is publicly announced (which will include the announcement 
of the non-public clinical data and may include announcement of the 
Offering) or you are cleansed by us or the Company.   
 

22. Two minutes after receiving that wall crossing email, Squillante responded by 

email to the underwriter, stating “Thank you – we agree.”  Squillante, his colleagues at the 

Investment Firm, and the staff of the underwriter then exchanged additional emails to schedule a 

teleconference to discuss the potential offering in more detail.  A meeting invitation, which 

included Squillante and his colleagues at the Investment Firm, was sent and scheduled for the 

following morning. 

23. During that morning meeting on February 28, 2023 between the underwriter and 

Squillante’s colleagues at the Investment Firm, the underwriter discussed both the contemplated 

securities offering and recent negative clinical drug trial results and the timing of a press release 

concerning those results.   

24. Following that meeting on February 28, 2023, Squillante sold short an additional 

12,094 shares of Praxis stock in one of his personal brokerage accounts.  Over the next two days, 

March 1 and March 2, Squillante sold short an additional 23,492 shares of Praxis stock in 

another of his personal brokerage accounts.  By the end of the trading day on March 2, 2023, 

Squillante’s personal brokerage accounts were short a total of 38,086 Praxis shares. 

25. On March 3, 2023, at 7:30 am, Praxis publicly disclosed its negative clinical trial 

results.  These results had previously been shared with Squillante’s colleagues at the Investment 

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Firm via the wall crossing protocol.  Specifically, Praxis announced that the trial for its most 

advanced drug candidate to treat nervous system tremors did not establish the primary efficacy 

endpoint by a statistically significant amount compared to the placebo. 

26. Only minutes later, between 7:41 am and 7:49 am, Squillante purchased a total of 

38,086 shares of Praxis stock to cover his short position in his two personal brokerage accounts.  

The market price of Praxis’s stock began to drop between the public announcement of its clinical 

trial data and Squillante’s covering purchases.  Overall, in the first trading day after Praxis’ 

public announcement, the market price of Praxis stock dropped by almost 66%, from a closing 

price of $2.92 per share on March 2, 2023 to a closing price of $0.9965 per share on March 3, 

2023.  

27. As a result of Squillante’s illegal use of material nonpublic information about 

Praxis, he realized $46,421 in proceeds from his trading in Praxis stock between February 27 and 

March 3, 2023. 

Squillante’s Trading in Zynex, Inc. 

28. In May 2023, Zynex, Inc. (“Zynex”) was a publicly-traded company that 

designed, manufactured and marketed medical devices.  On the morning of May 2, 2023, the 

underwriter for a potential transaction relating to Zynex had a conversation with Squillante to 

discuss that potential transaction.  The potential transaction had two parts: (1) the company was 

considering a convertible debt securities offering, and (2) a major company shareholder was 

considering a secondary offering of the company’s common stock owned by that shareholder.   

29. The underwriter sent a follow-up email to Squillante at 12:05 pm that day, 

confirming their conversation and further confirming that, “in the course of such conversation 

you [Squillante] have received non-public and potentially material information within the 

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8 
 

meaning of the U.S. federal securities laws” about the proposed transaction, its “timing, 

structure, terms and proposed use of proceeds of the proposed convertible debt offering” and that 

Squillante may get additional information about the transaction in the future.   

30. The underwriter’s email further stated: 

You acknowledge that the U.S. federal securities laws and other laws 
prohibit any person who has material non-public information about a 
company from purchasing or selling securities of that company or from 
communicating such information to any other person under circumstances 
in which it is reasonably foreseeable that such person is likely to purchase 
or sell such securities.  You have agreed that, for so long as the 
confidentiality obligation remains in effect, you will not directly or 
indirectly engage in market transactions relating to the Company’s 
securities and related instruments, . . . .  You have further agreed that, for 
so long as the confidentiality obligations remain in effect, you will treat 
and keep all non-public information that you receive as confidential, you 
will not disclose any of the non-public information that you receive to any 
other person in your firm without the same restrictions regarding the use 
of the non-public information being imposed on such persons and you will 
use the non-public information only in connection with evaluating, 
analyzing and negotiating a potential investment in the Company and not 
for any other purpose. 
 

31. Squillante responded to the underwriter’s email 10 minutes later, at 12:15 pm, and 

selected a time from among those that had been proposed for a follow-up meeting with the 

underwriter. 

32. Approximately 15 minutes later, an employee of the underwriter sent a calendar 

invitation to Squillante and several of his colleagues at the Investment Firm to set a meeting for 9 

am the following morning, May 3, 2023.  The calendar invitation also provided a link to 

documents that would be discussed in detail at the meeting.  Squillante knew, or was reckless in 

not knowing, that the eventual public announcement of the transaction being discussed would 

likely drive Zynex’s stock price down significantly. 

33. At 12:05 pm on May 2, 2023, the same time that he received the underwriter’s 

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9 
 

email confirming their conversation about Zynex, Squillante began selling short shares of Zynex 

stock in one of his personal brokerage accounts.  That afternoon, between 12:05 pm and 3:58 

pm, Squillante sold short a total of 2,900 shares of Zynex.   

34. On the following day, May 3, 2023, Squillante sold short an additional 10,100 

shares of Zynex stock in two of his personal brokerage accounts.  By 3:44 pm on May 3, 2023, 

Squillante’s personal brokerage accounts had sold short a total of 13,000 Zynex shares. 

35. On May 3, 2023, at 4:01 pm, Zynex announced that it would be making an 

offering of $50 million of its senior convertible notes and it also announced that its CEO was 

beginning an underwritten public offering of 2,000,000 shares of his Zynex stock.   

36. Only minutes later, beginning at about 4:14 pm and continuing until 4:20 pm, 

Squillante purchased 6,500 shares of Zynex stock to cover fully his short position in one of his 

personal brokerage accounts.  Squillante fully covered the short position in his other personal 

brokerage account by buying shares beginning at 4:36 pm on May 3 and continuing the next day.  

The market price of Zynex’s stock dropped between the public announcement of securities 

offerings and Squillante’s covering purchases.  Overall, in the first trading day after Zynex’s 

public announcement, the market price of Zynex stock dropped by about 35%, from a closing 

price of $14.56 per share on May 3, 2023 to a closing price of $9.37 per share on May 4, 2023. 

37. As a result of Squillante’s illegal use of material nonpublic information about 

Zynex, he realized $37,528 in proceeds from his trading in Zynex stock between May 2 and May 

4, 2023. 

The Scope of Squillante’s Misconduct 

38. Squillante engaged in misconduct similar to that detailed above relating to Praxis 

and Zynex shares with a total of at least ten different securities.  The chart below lists the dates 

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10 
 

on which Squillante engaged in illegal trading on the basis of material nonpublic information 

(“MNPI”) that he learned, and had a duty to keep confidential as part of his employment by the 

Investment Firm.  The chart below also lists the profits that Squillante earned from his trading in 

each of the ten securities. 

Offering 
Company 

Date/Time 
of Wall 
Crossing 
or MNPI 
Awareness 

Date/Time 
Squillante 
Began to 
Trade 

Date/Time of 
Public 
Announcement of 
MNPI 

Price Decrease 
of Offering 
Company’s 
Stock Within 
One Day of 
Public 
Announcement 

Squillante’s 
Profits from 
Trading 

Accelerate 
Diagnostics, Inc. 

8/15/2022 8/16/2022  
9:35 AM 

8/17/2022 
6:00 PM  
Secondary Offering  

27.19% $10,575 

Accelerate 
Diagnostics, Inc. 

8/15/2022 8/18/2022  
3:00 PM 

8/18/2022 
9:30 PM  
Pricing of 
Secondary Offering  

49.40% $1,098 

Mind Medicine, 
Inc. 

9/20/2022 
8:11 AM 

9/20/2022 
10:39 AM 

9/27/2022 
4:17 PM 
Secondary Offering 

47.06% $53,548 

AerSale Corp. 11/14/2022 
10:47 AM 

11/14/2022 
12:58 PM 

11/15/2022 
5:22 PM 
Secondary Offering 
and Share 
Repurchase 

12.73% $2,748 

DZS, Inc. 11/14/2022 
10:47 AM 

11/14/2022 
1:05 PM 

11/16/2022 
4:01 PM 
Secondary Offering 

15.91% $7,110 

Clearfield, Inc. 12/1/2022 
7:40 PM 

12/2/2022 
10:55 AM 

12/6/2022 
4:12 PM 
Secondary Offering 

6.22% $9,445 

Napco Security 
Technologies, 
Inc. 

2/7/2023 2/8/2023 
9:44 AM 

2/8/2023 
4:05 PM 
Secondary Offering 

7.68% $8,990 

Altisource 
Portfolio 
Solutions SA 

2/8/2023 
10:54 PM 

2/9/2023 
11:15 AM 

2/9/2023 
4:28 PM 
Secondary Offering 

12.78% $20,627 

Praxis Precision 
Medicines, Inc. 

2/27/2023 
3:22 PM 

2/27/2023 
3:24 PM 

3/3/2023 
7:30 AM 
Negative Clinical 
Results provided in 
context of proposed 
Secondary Offering 

65.87% $46,421 

Zynex, Inc. 5/2/2023 
12:05 PM 

5/2/2023 
12:05 PM 

5/3/2023 
4:01 PM 

35.65% $37,528 

Case 3:25-cv-01457     Document 1     Filed 09/05/25     Page 10 of 13



11 
 

Secondary Offering 
of Equity and 
Offering of 
Convertible Notes 

ANI 
Pharmaceuticals, 
Inc. 

5/8/2023 5/11/2023 
10:48 AM 
 

5/11/2023 
4:01 PM 
Secondary Offering 

5.19% $6,973 

DZS, Inc. 5/30/2023 
9:15 AM 

5/30/2023 
11:12 AM 

6/1/2023 
8:00 AM 
Announcement of 
Financial 
Restatement 

36.23% $11,902 

    Total $216,965 
 

CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES  

(Defendant’s Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 
 

39. Paragraphs 1 through 38 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

40. By reason of the conduct described above, Defendant, directly or indirectly, in 

connection with the purchase or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, or of any facility of any national securities exchange, 

intentionally, knowingly, or recklessly, (i) employed devices, schemes, or artifices to defraud; 

(ii) made untrue statements of material facts or omitted to state material facts necessary to make 

the statements made, in the light of the circumstances under which they were made, not 

misleading; and/or (iii) engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon any persons, including purchasers or sellers of the 

securities. 

41. By reason of the conduct described above, Defendant violated Exchange Act 

Section 10(b) [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R §240.10b-5] thereunder. 

 

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PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that this Court: 

A. Permanently restrain Defendant, his agents, servants, employees and attorneys, 

and those persons in active concert or participation with him who receive actual notice of the 

injunction by personal service or otherwise, and each of them, from violating Section 10(b) of 

the Exchange Act [15 U.S.C. §78j(b)], and Rule 10b-5 thereunder [17 C.F.R §240.10b-5] by (i) 

buying or selling a security of any issuer, on the basis of material nonpublic information, in 

breach of a fiduciary duty or other duty of trust or confidence that is owed directly, indirectly, or 

derivatively, to the issuer of that security or the shareholders of that issuer, or to any other person 

who is the source of the information; or (ii) by communicating material nonpublic information 

about a security or issuer, in breach of a fiduciary duty or other duty of trust or confidence, to 

another person or persons for purposes of buying or selling any security; 

B. Order Defendant to disgorge, with prejudgment interest, all ill-gotten gains that 

were obtained by reason of the unlawful conduct alleged in this Complaint, pursuant to Section 

21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)]; 

C. Order Defendant to pay an appropriate civil monetary penalty pursuant to Section 

21A of the Exchange Act [15 U.S.C. §78u-1]; 

D. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and  

E. Grant such other further relief as the Court may deem just and proper. 

 

 

 

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JURY DEMAND 

 The Commission demands a jury in this matter for all claims so triable. 

DATED: September 5, 2025 

      Respectfully submitted, 

      /s/ Kathleen Burdette Shields    
      Kathleen Burdette Shields (Mass Bar No. 637438) 
      Sarah McAteer (Mass Bar No. 706403) 
      SECURITIES AND EXCHANGE COMMISSION 
      Boston Regional Office 
      33 Arch Street, 24th Floor 
      Boston, MA 02110 
      Phone: (617) 573-8904 (Shields direct) 
      (617) 573-8906 (McAteer direct) 

(617) 573-4590 (fax) 
      [email protected] (Shields email) 
      [email protected] (McAteer email) 
 

Local Counsel: 
 
Michelle L. McConaghy (ct 27157) 
Assistant United States Attorney 
United States Attorney’s Office 
Connecticut Financial Center 
157 Church St., 23rd Floor 
New Haven, CT  06510 
Phone: (203) 821-3700 
Fax: (203) 773-5373 
[email protected] 

Case 3:25-cv-01457     Document 1     Filed 09/05/25     Page 13 of 13

mailto:[email protected]
mailto:[email protected]